Fort Lee company TRANZACT helps with Wal-Mart's new auto-insurance venture

A Fort Lee company run by two men who grew up in Englewood has made a deal with Wal-Mart to sell auto insurance to its legions of price-conscious customers.

TRANZACT, which markets and sells insurance directly to consumers for major insurers, operates Autoinsurance.com, a website where consumers can compare the prices and policies of half-a-dozen insurers, and then get the best deal — similar to how websites such as Kayak enable consumers to compare airline routes and prices.

Under the deal, Wal-Mart will receive revenue from TRANZACT for promoting the website in stores as well as on the retailer’s website. Although there are other insurance comparison sites, the company said theirs provides more accurate and detailed information.

TRANZACT, which has 900 employees, about two thirds of them licensed insurance salespeople, will also run a call center to provide consumers with information and execute the sales.

“There are very few places where you can, quote, unquote, compare a spreadsheet of the carriers against each other,” said David Graf, TRANZACT’s chief executive. “That’s really the big thing. You can compare the carriers in an apples-to-apples environment.”

TRANZACT creates direct-marketing campaigns for insurance companies besides selling directly to consumers. The company serves the auto, home, health and life insurance industries, working with insurers that include MetLife, Cigna, Progressive, and Mutual of Omaha.

The business was born from the ashes of a company that Graf created with a childhood friend, Marc Byron, and Byron’s brother, David, who all grew up in Englewood.

In the late 1990s, the three created Paradigm Direct of Fort Lee, a marketing company later bought by The Mosaic Group, a a publicly traded Canadian company. The three Bergen County natives stayed on as executives, with Marc Byron as CEO. Mosaic struggled financially, however, and eventually filed for bankruptcy.

Graf said he and Byron then bought the company back, with the help of a private equity firm, and used it to create TRANZACT, in which Marc Byron is chairman but no longer active on a day-to-day basis. The executives applied their expertise in direct marketing and sales to the insurance industry.

“We are just starting, but potentially it’s very big,” Graf said of the Wal-Mart deal. “To partner in this way with Wal-Mart can be very significant.”

The venture came about when Joshua Kazam, an entrepreneur who had partnered with the retail giant to sell a flea and tick preventative treatment for pets, was talking with company executives about other areas it could move into.

Wal-Mart was interested in auto insurance, Graf said. Kazam, who grew up in Morristown and Bernardsville, knew of TRANZACT’s success in selling insurance because two of his partners had invested in the company.

Together, Kazam’s team and TRANZACT came up with the idea of the website, which is owned by a Fort Lee-based company created for the venture, Tranzutary Insurance Solutions LLC, in which TRANZACT has a stake.

A pilot program in which the website was promoted in Wal-Mart’s Pennsylvania stores over the past year showed that consumers on average saved more than $1,000 over their previous insurance, the retailer said.

The success of the pilot prompted Wal-Mart to expand the program to eight states — Arkansas, Louisiana, Mississippi, Missouri, Oklahoma, Pennsylvania, Tennessee and Texas. It opened for business Tuesday, offering consumers that chance to pull up details of their policy, and compare those with policies from other companies, including Progressive, Esurance, and The General, whose policies are also for sale on the site.

Rick Lockton, Wal-Mart director of merchandising, who helped create the venture, said the company’s goal was to find a way to simplify a process that was “very time-consuming and confusing for our customers.”

“We feel like we have really simplified the process,” he said. “In less than five minutes, you can get quotes from up to six carriers.”